baby care

Baby Care in India

Euromonitor International

August 2011

Baby Care India

Euromonitor International Page i

List of Contents and Tables

Headlines ................................................................................................................................................................. 1

Trends ...................................................................................................................................................................... 1

Competitive Landscape .......................................................................................................................................... 2

Prospects .................................................................................................................................................................. 2

Category Data ......................................................................................................................................................... 3

Table 1 Sales of Baby Care by Category: Value 2005-2010 .......................................................... 3

Table 2 Sales of Baby Care by Category: % Value Growth 2005-2010 ......................................... 3

Table 3 Baby Care Premium Vs Mass % Analysis 2005-2010 ....................................................... 3

Table 4 Baby Care Company Shares 2006-2010 ............................................................................ 4

Table 5 Baby Care Brand Shares by GBN 2007-2010 ................................................................... 4

Table 6 Baby Skin Care Brand Shares by GBN 2007-2010 ........................................................... 4

Table 7 Forecast Sales of Baby Care by Category: Value 2010-2015 ............................................ 5

Table 8 Forecast Sales of Baby Care by Category: % Value Growth 2010-2015 ........................... 5

Table 9 Forecast Baby Care Premium Vs Mass % Analysis 2010-2015 ........................................ 5

Baby Care India

Euromonitor International Page 1

BABY CARE IN INDIA

HEADLINES • Baby care value sales grow by 9% in 2010, to over Rs5.8 billion

• Baby skin care is the fastest growing category

• Unit prices of all categories within baby care rise in 2010

• Johnson & Johnson (India) Ltd remains the dominant manufacturer, with over three quarters of value sales

• Baby care is expected to grow by a constant value CAGR of 5% between 2010 and 2015

TRENDS • Baby skin care was the single largest category in 2010, in line with the review period. Johnson & Johnson

(India) Ltd has traditionally been the leader in this category, with its baby soap and skin care. Baby hair care is emerging as a separate business in its own right as well where some consumers purchasing baby hair care on top the other baby care products. Nonetheless, the product sales still relatively smaller than the other baby care products as some consumers are still using baby toiletries to wash baby and kids hair in review period. An increasing range of such products has been made available by companies. However, consumer education still needs to be pursued as Indian consumers tend still to use baby toiletries or adult shampoo to wash their baby’s hair.

• Value sales growth of baby care in 2010 was slightly faster than in 2009, with growth of over 9%. An increasing number of affluent households, particularly in urban areas, as well as the wider availability of baby care products in both modern and traditional stores has helped to drive continued growth in baby care products.

• Baby skin care and baby toiletries were the fastest growing products in baby care in 2010, with increases of over 9%. These two products are considered essential by many parents, for whom bathing with soap and massaging babies’ skin with oil is a daily ritual.

• Baby care products saw minimal unit prices increase in 2010. Companies such as Johnson & Johnson are still trying to push for more volume sales in India, particularly with the increasing presence of domestic companies, as well as other multinational companies, such as Pigeon.

• In 2010, medicated baby care nappies/diapers were still not a significant category, as consumers continued to use baby powders along with nappies/diapers for hygiene.

• Baby care remained almost entirely a mass market category in 2010. The availability of premium baby care products is very limited and they are a small niche. The bulk of Indian consumers are much more aware of mass brands, such as Johnson & Johnson and Himalaya, and these mass baby care brands have long been trusted by Indian families in terms of their quality.

• There have been attempts to differentiate baby care by age and create a different segment from that which Johnson & Johnson (India) Ltd dominates. Some companies, such as Marico and Alken (a licensee of Mattel brands) have launched toiletries and hair care products aimed at toddlers rather than babies. However, this remains a small niche, as the bulk of young children still use baby care products. Examples of products targeting children include Marico Ltd’s Parachute Starz hair care products (shampoo, hair oil and hair gel), VVF Ltd’s Doy Soap (bar soap shaped like cartoon animals) and Alken (shampoo and shower gel under the Barbie and Hot Wheels brands).

• In 2010, supermarkets/hypermarkets held a 15% share of baby care sales by value, and continue to make steady inroads into what was previously the preserve of neighbourhood stores, such as independent small grocers and chemists/pharmacies. As supermarkets/hypermarkets expand into smaller cities, where disposable incomes are rising, their share of baby care sales will increase.

• Baby care products with a natural/organic proposition are still very much a niche, with only a limited presence in India. Companies such as Kräuter Healthcare Ltd, with its Tenderil’s Herbal, is the most visible brand offering such products. The company’s range includes baby toiletries, hair care and skin care using

Baby Care India


organic and herbal ingredients; however, it is more focused on exporting its products to European markets than on domestic distribution and marketing. Dabur India, which offers ayurvedic formulations under the Dabur Lal Tail brand enjoys very high loyalty and strong trial and adoption rates by new mothers. The company claims that its products have been clinically proven to have benefits, such as increasing weight and height and inducing better sleeping patterns among infants.

COMPETITIVE LANDSCAPE • Johnson & Johnson (India) Ltd remains the clear leader in baby care products in India, with a value share of

over 76% in 2010. The company benefits from its reputation as a pharmaceutical manufacturing firm with stringent quality standards and scientific know-how, which is coupled with recommendation by paediatricians and healthcare personnel. Expansion in terms of both product variants and distribution helped the company to retain its leadership in baby care products over the review period.

• The other companies in the top five in baby care products in 2010 were Dabur India Ltd, Wipro Ltd, VVF Ltd and Himalaya Drug Co, which combined accounted for almost 18% of value sales in 2010.

• Baby care in India is dominated by multinationals, although this dominance is entirely due to Johnson & Johnson (India) Ltd. It is followed a host of local manufacturers, along with the Indian subsidiary of Oriflame. The domestic companies Dabur India Ltd and Emami Ltd have undertaken aggressive pricing and pack size strategies to create affordable products for consumers.

• More players such as Lilliput, Chico, Mom & Me and Alken, are entering baby care in India. However, these baby and children’s brands have relatively limited distribution compared to the leaders in baby care products in India, since retailing of some of the brands, such as Lilliput, Chico and Mom & Me, is largely confined to the companies’ own stores.

• The review period saw more companies, such as Johnson & Johnson and Himalaya, launch baby care gift sets in modern retailers. The typical gift sets contains moisturising baby soap, shampoo, powder, cream, lotion, nappy/diaper rash cream and, in some cases, baby wipes. The companies offer different pack sizes, with prices ranging from Rs100 to Rs300 per unit. This strategy offers long-term benefits for companies, as consumers that have been given such a gift set when their baby is born will often tend to continue to use the same brand if the quality is proven.

• There were no major innovations in baby care packaging in 2010.

• Baby care in India remains a mass-market category, with the top five companies all positioned in this segment, accounting for almost 94% of value sales in 2010. As such, advertising, availability, reputation and pricing are the key factors determining the leading companies’ position in baby care products.

PROSPECTS • India is still a young country where children below 12 years old will account for around 23% of the total

population in the forecast period. As a result, India may well attract more players to enter the baby care category. Urban and rural consumers are expected to see wider product availability in the forecast period, with mother and baby specialist stores, for example Lilliput, Mom & Me and Chicco, targeting urban consumers, while mass manufacturers, such as Johnson & Johnson (India) Ltd, Dabur India Ltd and Himalaya Drug Co, are anticipated to expand their distribution in smaller towns and rural areas. Consequently, competition in baby care will be more intense in the forecast period.

• Baby care sales are expected grow by a CAGR of almost 5% in constant value terms between 2010 and 2015. The constant value growth rate is projected to be faster than that of the review period, which saw a decline of just under 1% in constant value terms. The consumer base is expected to grow as more Indian consumers shift from unbranded products to branded products, such as baby oil. In addition, value growth will be driven by an increase in baby care product offerings in some specialist stores, which are typically more expensive because of the value-added benefit products offered.

• Baby skin care is projected to see the fastest constant value growth in the forecast period, with a CAGR of over 5%. As well as expansion of the consumer base, sales of baby skin care will be driven by consumers upgrading from standard baby oil to baby lotion, aided by increasing average household incomes.

Baby Care India


• Baby skin and toiletries are expected to maintain their dominance in the market in the forecast period, as these remain necessities for family in India.

• Nappy rash cream is expected to be more visible in the forecast period, as leading companies, such as Himalaya and Johnson & Johnson, are expected to increase availability and promote the use of such products. More parents are expected to purchase nappy rash cream through retail rather than getting such products on prescription from a paediatrician, contributing to growth in retail value sales of nappy rash cream in India over the forecast period.

• Unit prices of baby skin and hair care are expected to rise only marginally over the forecast period, as companies are expected to keep price increases to a minimum. However, input cost pressures are projected to be stronger. Manufacturers are still putting the focus on expanding baby care distribution in order to increase volume sales.

CATEGORY DATA

Table 1 Sales of Baby Care by Category: Value 2005-2010

Rs million 2005 2006 2007 2008 2009 2010 Baby Hair Care 590.6 634.4 680.0 723.2 776.7 838.0 Baby Skin Care 1,807.6 1,959.7 2,133.0 2,300.3 2,502.9 2,736.1 Baby Sun Care - - - - - - Baby Toiletries 1,500.6 1,626.8 1,778.9 1,930.0 2,098.7 2,292.7 Medicated Baby Care - - - - - - Nappy (Diaper) Rash - - - - - - Treatments Baby Care 3,898.8 4,220.9 4,591.8 4,953.4 5,378.3 5,866.8 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store

checks, trade interviews, trade sources

Table 2 Sales of Baby Care by Category: % Value Growth 2005-2010

% current value growth 2009/10 2005-10 CAGR 2005/10 TOTAL Baby Hair Care 7.9 7.2 41.9 Baby Skin Care 9.3 8.6 51.4 Baby Sun Care - - - Baby Toiletries 9.2 8.8 52.8 Medicated Baby Care - - - Nappy (Diaper) Rash Treatments - - - Baby Care 9.1 8.5 50.5 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Table 3 Baby Care Premium Vs Mass % Analysis 2005-2010

% retail value rsp 2005 2006 2007 2008 2009 2010 Premium 0.0 0.0 0.0 0.0 0.0 0.0 Mass 100.0 100.0 100.0 100.0 100.0 100.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Baby Care India


Table 4 Baby Care Company Shares 2006-2010

% retail value rsp Company 2006 2007 2008 2009 2010 Johnson & Johnson 75.9 76.2 76.4 76.5 76.1 (India) Ltd Dabur India Ltd 11.7 11.7 11.7 11.2 11.3 Wipro Ltd 3.4 3.4 3.4 3.3 3.2 VVF Ltd 1.9 2.0 2.1 2.1 2.2 Himalaya Drug Co, The 0.8 0.8 0.8 0.8 0.9 Karnataka Soaps & 0.5 0.5 0.5 0.5 0.5 Detergents Ltd Oriflame India Pvt Ltd 0.4 0.4 0.5 0.3 0.4 L'Oréal India Pvt Ltd - - - - - Others 5.5 5.0 4.8 5.2 5.4 Total 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Table 5 Baby Care Brand Shares by GBN 2007-2010

% retail value rsp Brand Company 2007 2008 2009 2010 Johnson's Baby Johnson & Johnson 76.2 76.4 76.5 76.1 (India) Ltd Dabur Lal Tail Dabur India Ltd 11.1 11.1 11.2 11.3 Doy VVF Ltd 2.0 2.1 2.1 2.2 Wipro Baby Soft Oil Wipro Ltd 1.7 1.7 1.7 1.6 Wipro Baby Soft Soap Wipro Ltd 1.7 1.7 1.6 1.6 Himalaya Himalaya Drug Co, The 0.5 0.5 0.6 0.6 Moisturising Baby Soap Mysore Sandal Baby Karnataka Soaps & 0.5 0.5 0.5 0.5 Soap Detergents Ltd Himalaya Gentle Himalaya Drug Co, The 0.3 0.3 0.3 0.3 Baby Shampoo Oriflame Baby Care Oriflame India Pvt Ltd 0.3 0.3 0.2 0.3 Dabur Baby Olive Oil Dabur India Ltd 0.6 0.5 - - Garnier Ultra Doux L'Oréal India Pvt Ltd - - - - Others 5.1 4.9 5.3 5.5 Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Table 6 Baby Skin Care Brand Shares by GBN 2007-2010

% retail value rsp Brand Company 2007 2008 2009 2010 Johnson's Baby Cream Johnson & Johnson 36.3 36.6 36.8 37.0 (India) Ltd Dabur Lal Tail Dabur India Ltd 23.8 24.0 24.0 24.3 Johnson's Baby Oil Johnson & Johnson 20.8 20.8 21.3 21.5 (India) Ltd Johnson's Baby Lotion Johnson & Johnson 10.1 10.3 10.5 9.8 (India) Ltd Wipro Baby Soft Oil Wipro Ltd 3.6 3.6 3.6 3.5 Oriflame Baby Oil Oriflame India Pvt Ltd 0.2 0.3 0.2 0.2 Dabur Baby Olive Oil Dabur India Ltd 1.3 1.1 - - Others 3.8 3.3 3.6 3.7

Baby Care India


Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Table 7 Forecast Sales of Baby Care by Category: Value 2010-2015

Rs million 2010 2011 2012 2013 2014 2015 Baby Hair Care 838.0 866.0 899.2 938.2 983.6 1,036.2 Baby Skin Care 2,736.1 2,840.5 2,965.3 3,125.4 3,309.8 3,521.7 Baby Sun Care - - - - - - Baby Toiletries 2,292.7 2,401.6 2,503.7 2,597.8 2,682.5 2,762.7 Medicated Baby Care - - - - - - Nappy (Diaper) Rash - - - - - - Treatments Baby Care 5,866.8 6,108.0 6,368.2 6,661.4 6,975.9 7,320.6 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

Table 8 Forecast Sales of Baby Care by Category: % Value Growth 2010-2015

% constant value growth 2010-15 CAGR 2010/15 TOTAL Baby Hair Care 4.3 23.7 Baby Skin Care 5.2 28.7 Baby Sun Care - - Baby Toiletries 3.8 20.5 Medicated Baby Care - - Nappy (Diaper) Rash Treatments - - Baby Care 4.5 24.8 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

Table 9 Forecast Baby Care Premium Vs Mass % Analysis 2010-2015

% retail value rsp 2010 2011 2012 2013 2014 2015 Premium 0.0 0.0 0.0 0.0 0.0 0.0 Mass 100.0 100.0 100.0 100.0 100.0 100.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

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